KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
In a significant move that could escalate trade tensions between Europe and China, the European Union (EU) has announced provisional tariffs on electric vehicle (EV) imports from China, with rates set to climb as high as 48%. This decision, which follows an anti-subsidy investigation, aims to address market distortions resulting from substantial Chinese government subsidies to its EV industry.
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The Tariff Breakdown
- SAIC Motor Corp (MG vehicles): 37.6% tariff increase on top of the existing 10% rate
- Geely (Volvo owner): 19.9% additional charge
- BYD Co.: 17.4% increase
- Other cooperating Chinese EV producers: Weighted average duty of 20.8%
- Non-cooperating firms: 37.6% levy
These provisional duties will take effect immediately, with definitive tariffs expected to be determined by November.
Trade Tensions Rise
- China's Potential Retaliation:
- Targeted anti-dumping probes on EU imports like pork
- Possible measures against European agricultural products, aviation, and large-engine cars
- Challenge at the World Trade Organization (WTO)
- EU's Stance:
- Open to a mutually beneficial solution adhering to WTO rules
- Ongoing talks with China over the next four months
Impact on the Automotive Industry
- Projected Reduction in Chinese EV Imports: 25%, valued at roughly $4 billion
- Concerns from European Carmakers:
- Mercedes-Benz, Volkswagen, BMW: Opposed to higher tariffs
- BMW CEO Oliver Zipse: Tariffs could disrupt business models and limit EV supply in Europe, potentially slowing down decarbonization efforts
Economic and Environmental Considerations
- Economic Impact:
- Potential increase in consumer prices
- Retaliatory measures from China could harm various sectors of the European economy
- Environmental Impact:
- Limiting affordable EV availability might hinder the EU's carbon reduction and sustainable transportation goals
The Path Forward
- Negotiations: Ongoing between the EU and China to find a resolution that addresses market distortions without triggering a trade war
- Stakeholders Watching: Automotive industry, policymakers, and consumers closely monitoring developments
The outcomes of these negotiations could have far-reaching impacts on global trade dynamics and
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